The film and TV streaming war empties the coffers

Future. As the entertainment industry pushes all the chips in on streaming, it’s important to note that none of these companies are actually making any real money… yet. But in order to command market share now and score a high stock price, streamers are spending unprecedented amounts on content anyway (great for creators and audiences). It may signal that success in the new Hollywood is more about stock prices than profits.

Spend money to make money…?
Streaming may not be the cash cow that most thought it would be.

• While Netflix is still comfortably the market leader and spends a whopping $17 billion on content, its subscriber growth has recently disappointed Wall Street and sent its stock down.
• Despite Peacock losing $1.7 billion last year and a projected $2.5 billion this year, it plans to spend $3 billion on content this year.
  • Its big streaming play, the 2021 Olympics, also scored a 42% drop in average prime-time viewership compared to the 2018 Games.
• Disney is projected to drop $3.2 billion on content during just the first few months of 2021, even though it too is losing money.
• Paramount+ is ratcheting up spending (up to $6 billion by 2024), even though it’s almost losing as much money as it puts in.
• And if they all want to compete with Warner Bros. Discovery, they better be ready to drop $20 billion per year on content, which is what incoming CEO David Zaslav said he’s going to do.

No wonder Netflix admitted to investors this past January that “while this added competition may be affecting our marginal growth some, we continue to grow in every country and region in which these new streaming alternatives have launched.”

In other words, “Don’t worry, Wall Street. We’re still growing… so keep our valuations high, so we can keep our spending high.”